Netcare says it has seen an emerging trend of new medical scheme members taking out cheaper plans as households continue to struggle financially in South Africa.<\/p>\n
Netcare published its unaudited interim group results for the six months ended 31 March 2023, posting what it described as a “robust financial performance”, given the prevailing economy.<\/p>\n
The group said that its finances for the period under review were strong compared to the six-month period ended 31 March 2022, even as the post-Covid-19 environment started to normalise.<\/p>\n
It added that Covid-19 activity levels are at their lowest since the pandemic began in 2020 and have been absorbed into daily operations.<\/p>\n
Moreover, it saw an improvement in the demand for private healthcare services, with an 11.5% increase in total paid patient days (PPD).<\/p>\n
The group said that the improvement in activity has increased revenue for H1 2023 by 9.7% compared to H1 2019.<\/p>\n
“Notwithstanding the fluid macroeconomic environment, we are encouraged by the ongoing improvement in our operational and financial performance,” the group said.<\/p>\n
“We are confident that our strategy positions us to benefit from the positive long-term dynamics driving growth in healthcare and we remain committed to realising growth opportunities, improving returns and the successful completion and delivery of our key strategic projects.”<\/p>\n
The group released the following key financials:<\/p>\n
New medical scheme trend\u00a0<\/strong><\/p>\n Despite the positive results, the group noted that economic headwinds are affecting customers, especially those entering the market.<\/p>\n The group said that existing medical scheme members have mostly retained their benefit plans. However, new medical scheme entrants are being priced out of more inclusive plans.<\/p>\n Increasing pressure on disposable income means that new medical scheme entrants are looking for cheaper, restricted plans.<\/strong><\/p>\n Despite the limited growth in medical scheme membership, the group said it was encouraged by the existing pool of covered lives, demonstrating the sustainable demand for private healthcare.<\/p>\n Load shedding\u00a0<\/strong><\/p>\n Despite load shedding having a serious effect on other businesses, Netcare said that it was able to contain these costs.<\/p>\n It said that most of its acute hospitals have full island capacity, allowing them to work completely off the grid. 200 backup diesel generators are also able to support its system.<\/p>\n The group also invested in a major solar power base across 72 sites, which is used during daylight hours and load shedding to ensure that care is still possible.<\/p>\n Diesel costs are expected to reach R165 million for the full year, an increase from R37 million in FY 2022.<\/p>\n Nursing\u00a0<\/strong><\/p>\n The group added that the national shortage of nurses is a significant constraint on the health sector.<\/p>\n It added that retaining the scarce skills of nurses is crucial for the business.<\/p>\n However, it said it is working with the government, regulatory bodies and other stakeholders to improve its under-utilised college capacity to improve the number of nurses in the country.<\/p>\n Although the group currently has the capacity to train 3,500 nurses, it is only accredited for 360 – despite the 9,000 prospective students for the 2023 year.<\/p>\n
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